Project Report: 2013-39 Institutional, Policy and Regulatory Framework for Sustainable Development of the Egyptian Aquaculture sector Project Report: 2013-39 Institutional, Policy and Regulatory Framework for Sustainable Development of the Egyptian Aquaculture Sector Authors Ian Gouldinga and Maggie Kamelb. Authors Affiliation aMegapesca Lda, Portugal and bArab African Advisers, Egypt Acknowledgment The consultants would like to express heartfelt thanks for the excellent support given by all members of the IEIDEAS Project Team in the organization and implementation of the mission. 2 List of Abbreviations CAA Competent Administrative Authority CLAR Central Laboratory for Aquaculture Research DANIDA Danish International Development Agency DDE Dichlorodiphenyldichloroethylene EEAA Egyptian Environmental Affairs Agency EEZ Exclusive Economic Zone EFPEA Egyptian Fish Producers and Exporters Association EIA Environmental Impact Assessment EOP End of Project EPA Eicosapentaenoic acid DHA Docosahexaenoic acid EU European Union GAFRD General Authority for Fish Resources Development GOVS General Organization for Veterinary Services Hg Mercury IEIDEAS Improving Employment and Income through the Development of Egypt’s Aquaculture Sector IUU Illegal Unregulated and Unrecorded JICA Japan International Cooperation Agency LOQ Limit of Quantitation M4P Making Markets Work for the Poor Mo E Ministry of Environment MoWR&I Ministry of Water Resources and Irrigation MoALR Ministry of Agriculture and Land Reclamation MoU Memorandum of Understanding NGO Non Governmental Organization Pb Lead SDC Swiss Agency for Development and Cooperation SOE State Owned Enterprise SPS Sanitary and Phytosanitary SWOT Strengths, Weaknesses, Opportunities and Threats TL Team Leader ToR Terms of Reference TRIPS Trade-Related Aspects of Intellectual Property Rights UAC Union of Aquatic Cooperatives 3 Executive summary In the longer term a fish disease control regime should also be developed, with regulatory powers and surveillance capacity. Egyptian aquaculture is a great success story, with production reaching almost 1 million tons in 2011 representing an average Given the need for improved marketing of freshwater species, the consumption of about one fish per person per week. This report private sector is recommended to strengthen collaboration presents the findings of a mission undertaken in March 2013 to between the two main sector organizations (the Union of critically review the institutional, policy and regulatory framework Aquatic Cooperatives and the Egyptian Fish Producers and for sustainable development of the Egyptian aquaculture sector Exporters Association), strengthen their capacity to deliver on behalf of the “Improving Employment and Income through the business-related and marketing services, and prepare and Development of Egypt’s Aquaculture Sector“ (IEIDEAS) project, implement a series of market development activities. implemented by WorldFish and CARE and funded by the Swiss Agency for Development and Cooperation (SDC). Ultimately, Egyptian fish producers are recommended to support a generic promotion campaign (in domestic and export The mission found that while there is a clear legal and institutional markets) for tilapia, to be funded by a feed or fry levy, and if framework for aquaculture, there is a need to update the possible supported by Government structural funds. legislation to reflect the valid allocation of land and water resources to this activity, and to streamline registration and approval procedures. Available sites are limited by land and water use conflicts (with agriculture, tourism, etc.), overarching and sometimes invalid restrictions on water usage, and environmental concerns while difficult licensing procedures force many operators into the grey economy, where they cannot access credit for investment to upgrade their facilities. The supply pattern for freshwater fish such as tilapia is extremely seasonal. A lack of processing establishments for packing and freezing means that prices fall significantly towards the end of the season, risking producer viability. Whilst the sector is clearly becoming more competitive, there is a need to improve distribution systems and handling to allow freshwater aquaculture products (in particular tilapia) to reach new markets, including exports. There is also a need for market development measures, but sector organizations currently lack capacity to provide business and marketing support. The marine aquaculture sector (mainly mullet) supplies 15% of the output, and is almost exclusively dependent on a fishery for wild fry, nearly all supplied by illegal fry fishers and traders. Variable supplies from this activity inhibit the development of marine hatcheries while uncontrolled harvest of marine fry also risks collapse of wild stocks. Egypt is currently not able to export aquaculture products to the EU, not because of high contaminant levels, but due to non-compliance with residue monitoring requirements set out in EU Directive 96/23/EC. Also in the domain of sanitary and phytosanitary controls, Egypt does not possess a system of coherent animal health control system for aquaculture, exposing the sector to potential disease risks. Government is advised to establish an inter-ministerial aquaculture committee to jointly address license applications and develop a coherent policy towards the management of water and land resources and environmental and other impacts of aquaculture activities. The General Authority for Fishery Resources Development is recommended to apply lease conditions and discounts as means of creating incentives for desirable aquaculture practices (such as use of formulated feeds, inputs of fry from hatcheries, intensification). Government is recommended to gain access to the EU market for aquaculture products by developing and implementing a residue monitoring plan in line with EU requirements. A more coherent approach to market policy is also suggested, with a review of trade and tariff terms, purchase policies in state owned enterprises and a study on fortification of fish feeds for improved food security. 4 Table of Contents Acknowledgements 2 List of abbreviations 3 Executive summary 4 Tables 6 Figures 6 1 Introduction 7 2 Policy framework for aquaculture in Egypt 7 2.1 Strategic Framework for Economic and Social Development Plan until 2022 7 2.2 Fisheries and Aquaculture Policy 7 2.3 Water Policy 8 2.4 Environment Policy 8 3 Institutional arrangements for aquaculture 9 3.1 Government institutions 9 3.1.1 Ministry of Agriculture and Land Reclamation (MoALR) 9 3.1.2 General Authority for Fish Resource Development (GAFRD): 9 3.1.3 General Organization for Veterinary Services (GOVS) 9 3.1.4 Central Laboratory for Aquaculture Research (CLAR) 10 3.1.5 Ministry of State for Environmental Affairs 10 3.1.6 Ministry of Water Resources and Irrigation (MoWRI): 10 3.1.7 Other Ministries 10 3.2 Sector representation 10 3.2.1 Union of Aquatic Cooperatives (UAC) 10 3.2.2 Egyptian Fish Producers and Exporters Association (EFPEA) 10 4 Legislative Framework 11 4.1 Aquaculture regulations 12 4.2 Leasing of aquaculture sites 12 4.3 Water resources 12 4.4 Environment 12 4.5 Licensing requirements 13 4.6 Impacts of current legislation on aquaculture 13 5 Key issues in sector development 14 5.1 Site locations and licensing 14 5.1.1 Access to land and water resources 14 5.1.2 Registration and licensing 14 5.1.3 Pollution controls 14 5.2 Risk of oversupply to the market 14 5.2.1 Investment in distribution infrastructure 16 5.2.2 Market research 16 5.2.3 Generic promotion and market development 16 5.2.4 Development of exports 17 5.2.5 Import substitution 18 5.3 Organisation of aquaculture business operators 18 5.4 Limited fry inputs for marine aquaculture 19 5.5 Weak sanitary and phytosanitary controls 20 5.5.1 Residue monitoring 20 5.5.2 Fish disease monitoring and controls 20 6 Conclusions and recommendations 21 6.1 Conclusion: Strengths weaknesses opportunities and threats in Egyptian aquaculture 21 6.2 Recommendations 22 6.2.1 Government of Egypt 22 6.2.2 Business operators 23 6.3 Donor community 24 Annex 1: Legislation applicable to the aquaculture sector 25 Annex 2: Outline intervention for introduction of aquaculture residue monitoring plan 26 5 List of Tables Table 1: Aquaculture cooperatives in Egypt 11 Table 2: Omega 3 FFA composition of fillets from Tilapia fed diets with various flaxseed oil content 17 Table 3: Exports of fishery products from aquaculture 18 Table 4: Imports of small pelagic fish by Egypt in 2012 18 Table 5: Estimated demand for marine fish fry, 2011 20 Table 6: Sources of marine fry, 2011 20 List of Figures Figure 1: Aquaculture Production 15 Figure 2: Wholesale Fish Real Prices (LE / Kg) at El Obur Market (2000 – 2009) 15 Figure 3: Market Development Strategy for EW aquaculture products 23 Figure 4: Processing and distribution investment 24 6 1. Introduction Aquaculture can clearly make a contribution to all of the elements within the national economic development and This report presents the findings of a mission to critically review agriculture strategies described. This contribution is recognized in the institutional, policy and regulatory framework for sustainable the specific policy related to fisheries and aquaculture described development of the Egyptian aquaculture sector. The study was in the next section. undertaken by an International Expert on Aquaculture Policy, and a National Expert on Institutions, on behalf of the Project 2.2 Fisheries and Aquaculture Policy “Improving Employment and Income through the Development of Egypt’s Aquaculture Sector“, implemented by WorldFish and The General Authority for Fishery Resources Development (GAFRD) CARE, and funded by the Swiss Agency for Development and laid down, in 2005, a policy for the development of the fisheries Cooperation(SDC). The objective of the mission was to assess the and aquaculture sector in Egypt until 2017. The overall aim of the current status of the Egyptian aquaculture sector, in terms of the policy is to increase the return on fish resources through policy, legal and institutional environment, with a view to environmentally compatible systems; reach annual production suggesting the major issues to be addressed within a future of 1.5 million ton (an annual per capita of local fish production policy dialogue. which amounts to 16.5kg) by 2017 so as to maintain per capita of fish production given the growing population; improve fish The mission commenced on 5th March 2013 and concluded with products from various sources to be compatible with international the submission of the final report on the 9th April. The mission requirements; and support marine aquaculture. The policy has included desk research and meetings in Cairo, Abbassa and three major objectives 2: Alexandria with relevant Ministries and institutions, sector 1. Ensure use of natural fisheries to achieve sustainability, representative organizations, service providers and fishery whilst exploring the possibility of using unexploited areas business operators. The mission included visits to aquaculture and types. hatchery, production, and grow-out facilities. 2. Maximize revenues from aquaculture projects, especially water resources. This could be achieved through incentivizing private and cooperative sectors and implementing research projects that seek to maximize 2. Policy framework for return in this sector. aquaculture in Egypt 3. Reform institutional structures for fish resources and build capacity. The structure and mandate of GAFRD needs to reviewed, particularly those related to control, regulation, 2.1 Strategic Framework for Economic and enforcement of regulations, implementation of pilot and Social Development Plan until 2022 exploratory projects in the field of development, modernization and guidance. In 2012, Egypt developed the Strategic Framework for Economic and Social Development Plan until 2022 to meet the needs of One of the key issues in the policy is that it proposes that GAFRD the post-revolution era and the demands of Egyptian citizens for ought to desist from activities related to production, use of water a more inclusive system and social justice. The ultimate goal of surfaces and aquaculture, which should be undertaken by the the framework is to double the national income and achieve full private and cooperative sectors. The role of GAFRD would be employment within a framework of social justice 1. Thus, it has six limited to setting environmental, health, economic and social main objectives: standards. In other words, it should assume the role of regulator 1. Secure a decent life for all Egyptians through achieving full rather than producer. employment. 2. Establish a state based on responsible democracy along To achieve the above mentioned objectives, the policy proposes with national participation. undertaking the following measures: 3. Shift to a new economic system that depends on advanced 1. Modernize fishing legislation and criminalize violative technologies and knowledge. fishing practices, fishing in shallow waters and in the 4. Establish an industrial structure of a high value added and Northern lakes to preserve the natural nurseries of young balanced industries. fish; creation of no fish zones. 5. Achieve consistent spatial development through using 2. Study fish resources in the exclusive economic zones (EEZ), information technology and communications, developing in collaboration with specialized scientific centers, with an integrated transport system and a shift to decentralization. the help of available expertise to develop short and long 6. Promote Egypt’s regional role in the Arab, African and term plans. Mediterranean regions. 3. Provide training courses to fishermen to clarify the importance of data and information; and raise their The plan emphasizes the importance of the agriculture and fishing awareness about fishing techniques and new technologies. sector to the economy which in 2011/2012 contributed 15% to 4. Identify suitable locations for marine fish cages – whether GDP and absorbed 27.8% of total labor. To achieve a more floating or immersed – seeking international expertise in balanced trade structure with high added value, the plan this area whilst laying down environmental rules and underlines the need to increase the value added of exports conditions suitable for the capacity of the water bodies. through more post-harvest processing activities and integration 5. Survey areas and actual locations suitable for marine among agriculture and manufacturing industries and services by aquaculture along the Mediterranean Sea and Red Sea promoting innovation in distribution, and marketing. In this coasts and specify the type of activity that can be respect the strategic framework builds on the objectives of the undertaken in each location. strategic vision of sustainable agricultural development until 6. Encourage private sector to plant mollusks enlisting the 2022, prepared by the Ministry of Agriculture, which are: help of international and local expertise and investigate 1. Improve rural population's standard of living and reduce exporting opportunities. rural poverty rates; 7. Develop High Dam Lake and study fish resources in it. 2. The sustainable usage of natural agricultural resources; 8. Encourage establishment of marine hatcheries and 3. Increase the agricultural productivity of land and water; identify suitable locations for their establishment. 4. Achieve a higher degree of food security of strategic 9. Raise average productivity of existing aquaculture to food commodities; 5 ton/feddan provided that production remains economic. 5. Strengthen the competitiveness of agricultural products in 10. Give more attention to the main types of fish (Nile tilapia) domestic and international markets; and through genetic enhancement programs to improve 6. Enhance agricultural investment climate. productivity. 1 Arab Republic of Egypt, Strategic Framework for Economic and Social Development Plan until 2022 (proposal for community dialogue), November 2012. 2 Tamer El-Deeb, "New Strategy to Increase Our Fish Production to 1.5 million tons," Taawon Newspaper, http://digital.ahram.org.eg/articles.aspx? Serial=516369&eid=5916 7 11. Promote investment in the fish feed and supporting The main objectives of this policy are to: industries with the aim of developing national supplies of • Improve efficiency of use of available resources; inputs (whether feed, tools or equipment). • Develop further resources; 12. Promote aquaculture in fresh water and desert land • Protect public health and environment; if water resources are sustainable. 13. Suggest alternative training programs to employ fishermen The policy objectives stress economic and social aspects of during fish ban periods. development. Economically, the policy aims for optimal use of 14. Amend rules of fish farms tenancy between GAFRD and available water resources by various economic sectors (industry, investors to ensure stability and a rewarding economic agriculture including fish farms, and drinking water) to promote return; facilitate dealing with banks to obtain credit. increase in production. It also promotes improvement of the The increase in rent should be within the limits of conditions for other sectors that use water (such as navigation commercial activities. and tourism). On the social side, the policy stresses the role that 15. Protect northern and internal lakes through: water could play directly and indirectly in job creation; realizing a. Criminalizing dehydration and pollution of lakes and social justice (whether in the distribution of water or in farmers' disrupting the environmental system. incomes); and achieving a minimum of food self-sufficiency. b. Studying fishing crafts suitable for every lake. Additionally, the policy aims to recover the costs of maintenance c. Studying reasons and sources of pollution and how to and operation to improve the services provided, as well as get rid of it. introduce institutional and legal reform to enhance water d. Specifying periods of fishing ban in each area in management. accordance with the nature and type of fish. e. Training lake managers to manage fisheries. Although this policy recognizes the importance of promoting f. Identifying priorities for improving water quality, aquaculture, it did not effectively change the position of the by scientific study of water exchange within lakes by MoWRI towards aquaculture in terms of right to first use of water. research entities. It remains the position of the Ministry, that aquaculture should g. Developing landing sites and equipping them with not take place in water in supply canals delivering water from the new equipment such as computers to record and Nile, which is available for agricultural irrigation and for drinking monitor quantities and various types of fish; link them water. Aquaculture is therefore restricted to using water in the with a data system at GAFRD to analyze and monitor drainage canals, which may contain agricultural run-off and other fish reserves. discharges (such as treated sewage). This policy is reflected in the h. Complete infrastructure (road network, extending Law on Fisheries No.124/1983 (see section 4). However, on a more electricity, and organizing irrigation and discharge positive note, in an attempt to close the gap between legislation canals) for current or proposed areas for aquaculture and what happens on the ground, the Ministry issued in 2013 a projects. decree (Decree No. 90/2013) that relaxes the limit of effluent from agricultural activities – including aquaculture – discharged in Although having in place a policy on aquaculture is a good step, canal waters. the mixture of measures to both regulate and promote fishery activity, and the mixture of capture fishing measures with aquaculture, undermines the internal consistency of the policy 2.4 Environment Policy approach. Over the past few years Egypt has emphasized the need to shift more towards sustainable economic development, as expressed Furthermore it is not clear to what extent this policy has been in the national development plan until 2012 and environment implemented. At least, it seems no progress has been made policy. Such development is effected through incorporating an regarding the proposed change in the role of GAFRD, as it is still environmental dimension in development projects and engaged in production through its hatcheries and ownership promoting SME projects in the area of environment. It also entails of the Egyptian Company for Fishing and Fishing Gears, which preservation of natural resources through development and operates fishing vessels, and aquaculture sites in Alexandria and promotion of natural reserves, preservation of marine and wild North Sinai. resources, and addressing the harmful impacts of climate change in coordination with relevant authorities. Egypt’s environment 2.3 Water Policy policy also provides that the state adopts financial policies that provide incentives to environmentally friendly enterprises and State policy towards agriculture, including aquaculture, is mainly increase penalties against violations and bad environmental constrained by the availability of arable land and limited water practices. The policy emphasizes the need to coordinate among resources in Egypt, since the country suffers from water poverty government and non-government authorities in the area of exacerbated by rapid population growth. Egypt depends mainly environment at both the national and local levels. This requires on the River Nile for its water. The groundwater in the Western supporting decentralization in environmental management and Desert and Sinai constitutes less than 3% of annual water reserves; building capacity of environment directorates in governorates. and rainfall and water desalination plants are located in remote areas and in small quantities. The spread of tourist resorts and A key element of environmental management is the requirement villages, which contain golf courts, swimming pools and artificial for investment projects which involve discharge to air, land or lakes, etc., uses the limited groundwater reserves and leads to water, to be subject to environmental controls, and this includes their depletion and to the degradation of the quality of water. aquaculture activities. The Egyptian Environmental Affairs Agency (EEAA) therefore requires certain activities to be subject to full Propelled by concern to meet water needs of various sectors environmental impact assessments (EIA). This can include certain in the country (particularly agriculture), the Ministry of Water types of aquaculture investment such as sea cages in the Red Sea, Resources and Irrigation (MoWRI) has developed national policies where the marine environment is considered to be more sensitive. for water resource management since 1975. The latest water policy was developed in 2000 and covered the period 1997-20173. For the first time, an integrated approach to water resource management was adopted, taking into account all levels of water supply and demand vis-à-vis the previous approach, which only took into consideration the MoWRI’s perspective. All stakeholders were involved in the planning process. 3 A new strategy for water development and management until 2050 was developed in 2011, but it has not been adopted by the new Government. 8 3. Institutional arrangements for 11. Provide technical opinions – within its competence – on public projects undertaken by other entities aquaculture that involve use of surface water or pollution of water. 12. Provide technical expertise and advice on designs 3.1 Government institutions and drawings, and carry out technical studies and economic feasibility studies for fishery projects. 3.1.1 Ministry of Agriculture and Land Reclamation (MoALR) The Ministry is concerned with developing the overall policies The Chairman of the organization has the authority of a Vice for agriculture (including aquaculture) and land reclamation, Minister and, accordingly, is authorized to issue relevant fisheries in accordance with national development plans with the aim of and aquaculture decrees and regulations. The headquarters of the developing agricultural resources, increasing the area of organization is in Cairo and branches are located in the major reclaimed land, and developing rural economies. It is also fisheries regions. These are located in Central Delta, Damietta mandated to conduct research and studies to develop area, Western region, Suez and Red Sea region, Ismailia region, agricultural, animal and fish production and use applications of The Nile Valley region and Aswan region. this research to develop the sector. In addition, the Ministry is concerned with coordination among different authorities GAFRD, besides being responsible for regulating fisheries, is also operating in the field of agriculture and land reclamation. in charge of extension and support activities. The main legislation for the Ministry are Law 53/1966, and Resolution 162 of 1996, defines the structure of the Ministry4 Under the current institutional setup, GAFRD is therefore the Under the Ministry the following organizations are main authority concerned with overseeing aquaculture. relevant to fisheries and aquaculture development: It is responsible for monitoring and controlling fish farms through • GAFRD GAFRD branches in each Governorate. It also oversees aquatic • The General Organization for Veterinary Services (GOVS). cooperatives as it sits on the board of the Union of Aquatic • The Agricultural Research Center (including the Central Cooperatives (UAC) which is the umbrella organization for Laboratory for Aquaculture Research(CLAR)) fishermen and aquaculture cooperatives regulated by Law These are described in more detail below. No. 123/193 (see section 3.2). Through this link, between GAFRD and the Union, GAFRD engages with sector representatives5. 3.1.2 General Authority for Fish Resource Development (GAFRD): GAFRD, a subsidiary of the MoALR, is the agency responsible for all 3.1.3 General Organization for Veterinary Services (GOVS) planning and control activities related to fish production. It was The Organization was set up, under the Ministry of Agriculture, established by Law No. 190/1983 with the aim of contributing to by Presidential Decree No. 187/1984 with the aim of protecting development of the national economy through fish resources, livestock (and human health) through preventive care against establishing horizontal and vertical expansion projects within the infectious and epidemic diseases. The ultimate goal is to develop framework of general state policy and state plan. According to national economy through increase of animal production rate to this Law, GAFRD is mandated to carry out the following functions: reduce gradually dependence on imported meat. The Organization 1. Work on the development of fisheries and sources and supervises quarantine facilities for live animals in accordance with overseeing the implementation of fishing laws and its Minister of Agriculture Decree No. 47/1967. implementing decisions and for aquatic areas to be determined by the decision of the President. GOVS is the Competent Authority nominated by the Government 2. Conduct research studies to increase production and to be responsible for certification of food safety conditions for reduce costs and make use of specialized third party, export of fishery products to the EU. The Fish Inspection Unit is whether national or foreign. the body in the Organization responsible for supervising, revising, 3. Establish pilot projects and models, and develop plans, and and enforcing conditions and procedures pertaining to exporting training and extension programs to obtain equipment and fish and marine products, in coordination with the Central provide required technical labor in the field of fisheries. Administration of Veterinary Quarantine and Inspections. 4. Regulate the exploitation of fishing areas and fish farms in In this respect it is responsible for implementing the Joint surface waters specified by the President and issue licenses Ministerial Decree No. (1909/2001) Regarding Regulations and for fishing, their maintenance and development and Procedures Related to Fish and Marine Products Exports to administrative enforcement against infringements and European Union Countries. irregularities in these areas. 5. Plan projects, fisheries and fish processing and implement projects in collaboration with Governorates. 6. Work on the development of fishing craft; disseminate mechanization and modern fishing methods; spread aware ness and technical training among fishermen; and propose draft decisions necessary to prevent gears and activities harmful to fish resources. 7. Conduct field survey of fishery resources. 8. Cooperate with international and regional bodies in matters related to preservation and development of fisheries in accordance with requirements of technical and economic cooperation agreements in this regard - and follow up the implementation of these agreements. 9. Establish public sector companies specializing in fisheries or participate in their creation and contribute to joint projects in accordance with the Arab and Foreign Capital Investment Scheme Law. 10. Propose marketing and pricing policy of local and imported fish in conjunction with the Ministry of Supply and Internal Trade. 4 http://www.agr-egypt.gov.eg/En_MinTargets.aspx 5According to the law only cooperatives can be members of the Union. 9 3.1.4 Central Laboratory for Aquaculture Research (CLAR) 3.2 Sector representation The CLAR is located at Abbassa and forms part of the Egyptian Agricultural Research Center. 3.2.1 Union of Aquatic Cooperatives (UAC) Law No. 123/1983 on Aquatic Wealth Cooperatives describes the Its main aim is to “design and carry out the research strategy for role and conditions pertaining to aquatic cooperatives, covering sustainable development of aquaculture and fisheries in Egypt, fisheries and aquaculture activities. It defines local cooperatives in accordance with the national agricultural strategy of the and the role of the UAC. The law states that judicial persons may country and integration with animal and plant production, in not participate in cooperatives (Article 2) thus excluding order to satisfy the food requirements from fish protein, to reach participation of companies. Cooperatives must also be formed by self-sufficiency from fish protein sources, keeping in mind not less than 20 individuals (Article 7). The law is highly environmental and socioeconomic aspects.” prescriptive with cooperatives only permitted to perform prescribed functions (Article 10); and distribution of surpluses In terms of facilities it is provided with 52 hectares of production also according to a specified formula (Article 17). Incentives to ponds (162 for production plus small experimental ponds) and a join cooperatives are provided by their tax exemptions (Article complex with offices, training facilities, laboratories, and 57), discounts on goods and services purchased from state accommodation. It has been extensively supported with enterprises, including a 10% discount on energy (Article 58) and assistance from JICA. It is staffed by 130 scientists working in preferential consideration in tenders (Article 59). 10 research departments as follows: 1. Fish genetics and breeding There are ten aquaculture cooperatives in place (Table 1), out of a 2. Fish hatchery and reproductive physiology total of 99 fisheries and aquaculture cooperatives. The total 3. Fish production and aquaculture systems number of individual members registered was 1,796 in 2011. 4. Limnology The largest are in Kafr el Sheikh and Damietta, each with over 5. Nutrition and feed technology 400 members, followed by Fayoum with 339 members. Fayoum is 6. Fish health and zoonosis reported to be the most active of these organizations, with the 7. Fish biology and ecology remainder only participating in sector issues to a limited extent. 8. Economics of aquaculture The cooperatives are collectively represented by the UAC 9. Extension (whose role is also defined in Law No. 123/1983), which now has 10. Fish processing and quality control three aquaculture members on its Board (of 15 members). The UAC represents the sector to Government, and has a seat on The annual research budget from the Government is the Board of the GAFRD. It is consulted on policy issues approximately LE1.5 million, excluding special projects (for example the UAC was asked by GAFRD to comment on the (externally funded). The budget is allocated across all departments proposals of the MoWRI for a stricter regime regarding licensing (with approximately 75% allocated to research and 25% to of water use for aquaculture). training and extension activities). Research covers a wide range of areas such as aquaculture methods, fish processing, breeding and 3.2.2 Egyptian Fish Producers and Exporters Association (EFPEA) genetics, nutrition and feed technology, health and diseases, and Although there were earlier attempts in the past to establish an aquaculture economics. alternative association of aquaculture producers, to represent wider sectoral interests and without the constraints of Law 3.1.5 Ministry of State for Environmental Affairs No. 123/1983, until 2007 these were not successful. The Ministry is the authority mandated with formulation of environmental policy and necessary plans for the protection of the However, in 2007, the Egyptian Fish Producers and Exporters environment. The Egyptian Environmental Affairs Agency (EEAA) Association (EFPEA) was established as an association under the under the Ministry is responsible for implementation of legislation. procedure defined by the Ministry of Social Affairs for NGOs. To get a license, fish farmers have to obtain the approval of the Membership has fallen from 47 initially to 26 at present. Agency after submitting an EIA study, in accordance with the main The annual membership fee is LE1,000/year. Its members include environment legislation Law No. 4/1994, amended by Law aquaculture producers and a number of feed suppliers. No. 9/2009, and its executive regulation (Prime Ministerial Decree Membership is open to individuals and corporate members, and No. 338/1995) amended by Prime Ministerial Decree can include wholesale and retail operators, as well as inputs No. 1741/2005. Fish farms also have to abide by conditions related suppliers. Its representation is therefore potentially wider than to discharge of water as set out in Law No. 4/1994. the Cooperative movement. 3.1.6 Ministry of Water Resources and Irrigation (MoWRI): The Association has several aims, but mainly to represent the The Ministry is mandated to develop irrigation system to achieve sector to Government and to improve the image and brand optimal use of water whilst meeting the needs of all sectors both identity of Egyptian aquaculture products. However, until now the in terms of quantity and quality. Technical the advice to the EFPEA has not developed its institutional structure, only existing Ministry is provided by the National Water Research Centre as a Board. It has no manager to undertake many of the detailed under the Ministry. To obtain a license, fish farms need to obtain tasks required. approval of the Ministry, represented by inspection departments affiliated with the Ministry, while marine fish farms need to obtain approval of Authority for Shore Protection. 3.1.7 Other Ministries In addition, other authorities that have oversight over aquaculture sites, and whose approval may be required (depending on circumstances), include: Ministry of Archaeology, Ministry of Tourism, the Authority for Shore Protection, and Border Guard (affiliated with the Ministry of Defense). 10 Table 1: Aquaculture cooperatives in Egypt No. Name of Cooperative Address 1 Aquaculture Cooperative in Damietta Damietta, Shata 2 Aquaculture Cooperative in Suez Suez, El-Ganayen Section, Shamandoura 3 Aquaculture Cooperative in Sharkia Sharkia, Markaz El-Hasaneya, Mansheyat Abu Omar 4 Aquaculture Cooperative in Kafr El-Sheikh Kafr El-Sheikh, 4 El-Mohandessen St., off El-Nabawy El-Mohandes St. 5 Aquaculture Cooperative in El-Amerya Alexandria, El-Anfoushy, The Cultural and Social Center for Fishermen 6 Aquaculture Cooperative in Edko Behaira, Markaz Edko 7 Aquaculture Cooperative in Fayoum Fayoum, Sheikh Amin St., off El-Nabawy El-Mohandes St. 8 Aquaculture Cooperative in Villages of West Port Said in Manasra Village Port Said, Zohour Section 9 Aquaculture and Fish Cages Cooperative in Kafr El-Sheikh Kafr El-Sheikh, Markaz Motobas, Port Said St., near Maher El-Shaarawy grocery 10 Aquaculture in Fish Cages Cooperative in Dakahlia Manzala, Soda Division, Aly Shaheen St. 4. Legislative Framework • Article 48: It is forbidden to construct fish farms except on infertile lands which are not suitable for agriculture, and The legislation governing the sector could be classified into four where the water supply comes from drains and lakes, and broad areas, as follows. More details of each of the measures not from irrigation (fresh) water. Government hatcheries described are shown in Annex 1. are exempt from this rule. Farms may only be established after obtaining a license issued by the Minister of Agriculture (GAFRD), which is issued after obtaining 4.1 Aquaculture regulations permission from the Ministry of Irrigation, which will specify the volume of water available, its source, inlet size The current overall legislation governing agriculture in Egypt is and mechanism of drainage. Law No. 53/1966. This law contains provisions for handling animals • Article 49: Fish farming areas will be declared by the and poultry. Chapter 1 of Book 2, deals with developing and decision of the Ministry of Agriculture. The Chairman of protecting animal wealth, but does not deal with fish explicitly. GAFRD has issued two such decisions. It is therefore not clear whether existing agricultural legislation • Article 50: Except for irrigation canals, it is prohibited to cut includes fish or not. or spray any water weeds specified by decree of GAFRD. The basic fisheries law of Egypt is contained within Act Number Various Decrees and Resolutions have been issued since 1983 124 of 1983 on Fishing, Aquatic Life and the Regulation for Fish related to aspects of fisheries administration. Presidential Decree Farms. This Act establishes GAFRD as the organization No. 90/1983 forms GAFRD under the MoALR. Presidential Decree responsible for administering the Act and establishes an No. 465/1983 describes powers and duties of GAFRD, including administrative framework for fisheries sector management. the right to lease all lands within 200m of shorelines for Although the basic fisheries legislation is relatively old, it has not aquaculture and fisheries activity (see below). Decision No. 70/ yet been reviewed or revised. A new law is reported to have been 1986 relates to the renting of land allocated by GAFRD for the drafted, but has not been approved. establishment of fish culture and hatcheries. Enforcement of the legislation is the responsibility of the Military Force for Marine and This Act is composed of 3 Sections divided into 65 articles. Related Affairs (on the seas) and the Police Force for Inland Water Section I deals with General Provisions. Section II provides for and Fisheries Affairs ("the water police"). water pollution and obstructions to fishing operations. Section III contains aquatic resources and the regulation of fish farms. The Act contains a number of provisions which impact on aquaculture. • Article 17: No foreign fish spawn or spat thereof shall be used in or introduced into the country for any purpose whatsoever without first obtaining a permit from the General Organization for the Fishery Resources Development Authority. • Article 19: It is prohibited to gather, transfer or possess fish fry from the sea or lakes or other water bodies, without the written consent of GAFRD. • Article 40: Fishermen's cooperatives may set up fish-collecting centers (markets) in the extraction areas except at the High Dam Lake. • Article 47: Concessions relating to the exploitation of aquatic resources and terms shall be issued by a decree of the Minister of Agriculture. The term of the concession shall not exceed 5 years and priority should be given to public authorities, public sector companies and cooperatives. 11 4.2 Leasing of aquaculture sites 4.4 Environment Utilization of agricultural lands is centrally controlled by the Environment related issues are regulated by Environment Law MoALR. Presidential Decree No. 465/1983 describes the powers No. 4/1994 which was amended by Law No. 9/2009. The law deals and duties of GAFRD, including the right to lease all lands within with water pollution from ships and prohibits the discharge of 200 m of shorelines for aquaculture and fisheries activity. materials that cause pollution into inland waters and seawater Only land which has been allocated to aquaculture may be leased from all sources, unless a license has been issued by the EEAA. The (through GAFRD) for aquaculture. Decision No. 70/1986 decreed Law requires anyone proposing discharge to a controlled water to that GAFRD will assign locations suitable for aquaculture and submit an EIA study, which is then reviewed by the Ministry of hatcheries. In addition, Decision No. 70/1986 deals with the Environmental Affairs, in order to receive the license. It also renting of land allocated by the GAFRD for the establishment outlines the environmental conditions and requirements (such as of fish culture and hatcheries. A Committee of the Authority is setting up an environmental self-monitoring system, maintaining responsible for defining areas suitable for fish farming and records for environmental contaminants, discharge of waste, hatcheries, and for dividing them into economic units for leasing. and periodic analysis for sampling and test results etc.) that fish Land is to be rented by public auction unless: farmers have to follow. The Ministry conducts periodic inspection • Rental is to government bodies, public companies or legal on farms. persons. • Projects are large, and have been proved economically The Law states that new establishments or projects as well as feasible. expansions or renovations of existing establishments must be • No bids are received, or bids are below the rentable value. subject to an EIA. The EIA should be submitted to the • Existing leases are in operation at the introduction Competent Administrative Authority (CAA), under which of the decision. jurisdiction the establishment or project falls. The CAA assesses the EIA and sends a copy to the EEAA for review. Subsequently, Land is leased to investors for a period of five years through a the CAA issues the license. The Act is implemented by Executive public tender, where the lease value is determined based on Regulation No. 338/1995, which identifies the establishments and capacity of production, location, availability of services and projects that must be subjected to an EIA based upon four basic infrastructure. After the expiry of the lease period, GAFRD could standards, namely: the type of activity, location of the project, take back the land and offer it for lease again through public exploitation of natural resources and the type of energy used in tender. This has led to underinvestment in the sector, and is the operation. To address the demands of processing EIAs and generally regarded as hindering development, as investors may creating a uniform structure for the submitted EIAs, the EEAA has not be able to obtain a suitable return on investment in such a developed Guidelines for Egyptian Environmental Impact short period of time. However, it also allows for re-allocation of Assessment, which describes in detail the procedures for the the site if it is not used productively. This has led GAFRD to seek preparation of an EIA. The approach adopted in the Guidelines to introduce lease conditions to ensure that the site is effectively depends on the classification of projects into the following three developed and managed. categories reflecting increasing levels of EIA according to the severity of possible environmental impacts: In an attempt to address this limitation, the Minister of Agriculture • White list projects with minor environmental impacts. issued Decree No. 1132/2007 extending the lease-holding period • Grey list projects which may have substantial impacts and to 25 years subject to an interim periodic review to ensure that may require a scoped EIA. investments are being undertaken. This Decree, however, has • Black list projects which require a fully-fledged EIA due to been ineffective, as according to Law No. 89/1998, which is the their potentially severe impacts. main legislation governing government tendering and procurement, if the rental value of land at the time of periodic The Guidelines include two screening forms, form A for white list assessment reaches LE 50,000, it has to be offered for a public projects and form B for grey list projects. For grey list projects the tender again. This also inhibits compliance with lease conditions EEAA may require a scoped EIA whose scope is defined by the to develop the site, since such developments enhance its value, EEAA on the basis of the information presented in form B. The thus risking its loss at subsequent lease renewal. It should be also Guidelines include a general outline of the content of a full EIA noted that public sector organizations and cooperatives are given report, as well as sectoral guidelines that define the content of EIA more favorable terms in public auctions, further reducing the reports for establishments that need full EIA. incentive for investment by private operators. Reportedly, fisheries projects belong to the grey list, which 4.3 Water resources requires fish farmers to fill in form B. However, fish farms situated in ecologically sensitive areas such as protected areas, or in urban The two main laws related to water that impact aquaculture areas, may be considered black list projects and require a are Law No. 12/1984 and 48/1982. The former is the legislation fully-fledged EIA study. One such region is the Red Sea. governing water and irrigation; it regulates the right of access to water by agricultural (including aquaculture) landholders. The Law also sets out the responsibility of the MoWRI in distributing irrigation water and determining the conditions of drilling water wells and use of underground water. Furthermore, the Ministry is responsible for enforcing Law No. 48/1982 concerning protection of the water of River Nile from pollution which determines the conditions of discharge of water in canals. The legislation has traditionally denied aquaculture right to use fresh water and placed strict conditions regarding the discharge of effluent. This is largely due to wide held misperception by the MoWRI that aquaculture is a large consumer a widely.... of water and its discharges are detrimental to water quality of the Nile and its irrigation canals. Law No. 48/1982 also prohibits the discharge into the Nile River, irrigation canals, drains, lakes and groundwater without a license issued by the MoWRI. Law No. 48/1982 is only applicable to inland waters and does not address usage of other water sources. 12 4.5 Licensing requirements 4.6 Impacts of current legislation on According to Law No. 124/1983, to establish a fish farm, a license aquaculture must be obtained from the MoALR, which is issued after Whilst officials within the government – in particular represented obtaining authorization of the MoWRI. The license must indicate by the MoALR and GAFRD – seek to support the aquaculture the quantity of water permitted for water use, its source, inlet size sector through, as far as possible, a flexible interpretation and and the method of drainage, including the conditions. application of the legislation, in general the legislation and institutional setup is out of date and does not reflect the current To obtain a license for aquaculture activities, the applicant should priorities and needs of the industry. There is a clear lack of fulfill the following requirements: coherence in Egypt’s state policy towards the aquaculture sector. • Inspection application with the data of the applicant and their partners – in case there are partners i.e. ID, land State policy as expressed in the Law No. 124/1983 concerning ownership deed or rent contract with approval of landlord regulation of aquaculture, appears to favor a policy to support (a copy and the original of landlord approval), as well as agriculture at the expense of aquaculture in terms of access to the expired license at renewal. land and water resources, as reflected in Article 48: • Approval of MoALR stating that the land in question is 1) Prohibition of use of fresh water in aquaculture, requiring fallow and is not suitable for agriculture. that agricultural drainage water be used instead; • Cadastral maps for the location of scale 1:2500, with the 2) Prohibition of establishment of fish farms on agricultural area, location and source of water (irrigation and discharge). land, and allowing their establishment only on desert or • Drawings of the various establishments such as pools, fallow land. gates, levers plants, storehouses, management and workers premises. The legislation thus disfavors the sector through prohibition of • Receipt for paying fees (where fees amount to LE11 for use of fresh water and allowing establishment of fish farms only feddan including inspection and licensing fees, service fees on land not suitable for agriculture. Furthermore, by prohibiting and taxes). use of fresh water (except in hatcheries established by the state), • Approval of MoWRI. it puts private sector hatcheries at a disadvantage. This • For marine aquaculture which relies on sea water, the disadvantage has been further enhanced in reality by allowing approvals of the Authority for Shore Protection and Guard capture of fish fry from the wild which competes directly with of Borders are required. hatcheries. • If the location is suitable for establishing a fish farm, the competent authority sends a copy of the application Furthermore, the lack of a coherent strategy across different together with 2 copies of cadastral maps and schematic Ministries has resulted in a long list of license and permit drawings for industrial establishments, statement of requirements (see Annex 1 for licensing requirements) requiring irrigation and discharge sources, specifications of feeding separate approvals of multiple competent authorities. As a result, and discharge plants – if applicable, to obtain the approval unlicensed fish farms constitute nearly 60% of the sector. of MoWRI provided that the detailed drawing is presented during inspection procedures. On the other hand, the government has stopped short of a • If the irrigation inspection authority approves, the fish farm rigorous enforcement of this legislation, and there are many owner should implement the construction works in examples of aquaculture farms in operation in contravention of accordance with the drawings under the supervision of the these measures. Whilst this has allowed the sector to develop to a irrigation engineer for the feeding and discharge openings. degree, the operation of farms with doubtful legality, limits their access to credit for investment and expansion. It also means that Upon approval of the license, the province affiliated with GAFRD the Government of Egypt is not able to take full advantage in issues a “Fish Farm Card” which entitles the investor to the terms of tax revenues. following: • Obtain a share of feed, if available; There is a clear need to update policy to ensure that support for • Obtain mullet fry; the sector (or at least equal treatment with other agricultural and • Periodic passage of GAFRD specialist to provide the livestock activities) is expressed in the legal framework. required technical guidelines and solve breeding or Aquaculture policy should therefore be to revise the Fisheries Law disease problems if applicable. No. 124/1983, and ensure that the needs of aquaculture are considered in the resource allocation approach of MoWRI. There is also an evident need to strengthen coordination amongst all of the Government authorities involved in issues of permits, as well as other regulatory controls (such as SPS issues). 13 5. Key issues in sector development 5.1.2 Registration and licensing Aquaculture operators, especially smaller individual operators, find the system of permits and licenses required to operate to be 5.1 Site locations and licensing a burden. One operator reported a requirement for 16 separate permits. There is clearly scope for a substantive review of this 5.1.1 Access to land and water resources system, with the objective of streamlining the administrative As described in Section 4, aquaculture using irrigation and Nile requirements. A number of options are available, to include: waters may only lawfully take place in locations where a) it does • Removing certain low impact operators (defined by size, not occupy land designated as agricultural land and b) where it species, stocking density) from the requirement for does not use fresh water supplied from the Nile or from irrigation licenses. The system should distinguish between canals (unless the activity is hatchery operation operated by the registration and licensing, where all operators are required Government). Additional constraints are placed on selection of to register (thus ensuring their location, activity and sites by permit requirements applied by MoWRI and Ministry of dimensions are recorded for statistical purposes), whilst Environment, which will determine on a case by case basis whether those which may have negative impacts are subject to the the water use and discharge conditions conflict with relevant stricter controls delivered by a licensing system. criteria. Thus cage aquaculture activities upstream of the lowest • Introducing of aquaculture zones (where substantive barrage on the Rosetta branch of the Nile River have been permission from different authorities are obtained by restricted on the basis of its contribution to low oxygen levels. On GAFRD for the whole region, with subsequent investors the other hand, there is no legislation which covers location of needing only to sign the lease with GAFRD). marine cages (although their requirements for permits from the • Establishing a streamlined licensing system Ministries of Environment, Defense and Tourism may restrict (implementing a “one stop shop” whereby key authorities locations) and there is no legislation concerning use of combine their application forms, and jointly (via an groundwater in infertile lands. aquaculture committee) consider the application, thus removing the need for serial applications, and ensuring The main consequences of these restrictions are that: that license and lease conditions are coherent and reflect • Aquaculture development is spatially limited to those sites the requirements of a range of regulatory requirements. which meet the criteria; these may not be optimal in terms of production criteria (for example energy costs in pumping, 5.1.3 Pollution controls water quality, soil conditions etc.). Under both Law No. 48/1982 concerning protection of the water • Aquaculture operators utilizing seawater, or groundwater, of River Nile from pollution and Law No. 4/1994 on the or using marine cage production operate without a clear Environment, effluent from aquaculture operators is required to legal basis. comply with discharge requirements, which must meet specific • Farmers are not free to use their land for any agricultural standards. Operating licenses specify the allowed quantity and use (crops, livestock or fish production), leading to quality of effluent to be discharged and may, as a condition sub-optimal use of national resources. require license holders to provide suitable waste treatment. • Water quality of “drainage” canals may be a source of Licenses can be revoked under certain conditions. If, for example, contamination of aquaculture products. the pollution level of a licensed discharge increases and the • The restrictions do not recognize the potentially facility fails to install appropriate treatment within a certain advantageous use of aquaculture effluent to fertilize crop period, the license can be revoked. agriculture. • Private sector hatchery businesses operate under greater In general, these requirements appear not to have impacted restrictions compared to competing government operators. unduly on aquaculture operators, although this may be due to the fact that many of those potentially affected do not operate Overall, the legal limitations distort the business environment with the required permits. What is clear is that the system does for aquaculture and influence investment decisions. Of particular not reflect the limited impact of certain types of aquaculture. damage is the resulting uncertain or poorly defined legal status of For example, low input, extensive production results in very many operators, which undermines incentives for investment, limited environmental impacts (and indeed may produce an and limits availability of formal credit for development (due to effluent with a lower BOD (Biological Oxygen Demand) than the lack of collateral). inlet water. There is potential to release certain types of aquaculture from any of these licensing requirements, and this may promote their lawful development in the formal sector. 14 5.2 Risk of oversupply to the market Production from Egyptian aquaculture has grown rapidly since 1997, to almost 1 million ton in 2011. Tilapia and carp comprise 83% of aquaculture production. Figure 2 shows the trend in the average ex-farm price of tilapia since 1995, indicating that prices of fish have fallen in real terms over the entire period of production growth. This is a typical feature of a successful aquaculture sector, indicating that the market is functioning well (in that prices are responding to increasing supplies) and that aquaculture operators are responding by increasing efficiency of production (especially so considering that costs of feed inputs have increased significantly). Egypt: Aquaculture production (1000 ton) 2000 1000 0 Production 4 1991 9 7 19 199 000 2003 2006 2009 2 Tilapia and carp - 81 3,000 ton Tilapia 21% 6 2% Carp Figure 1: Aquaculture production in Egypt (Source GAFRD 2011). However, there is now anecdotal evidence that many fish producers are finding significant pressure on margins. The risk of over-supply to the market, especially during peak harvesting season (November onwards) is real. Such events have been experienced in the marketing of aquaculture products elsewhere (Pangasius from Vietnam, salmon from Norway, trout in the UK and shrimp from SE Asia), resulting in withdrawal of many producers from the business. There is a risk that the Egyptian sector could lose some of the significant gains made in terms of rural employment and food security, unless steps are taken to develop the market in line with growth in production capacity. Market development measures are therefore required to expand the market and ensure that demand increases with supply. Some of the measures proposed are: • Investment in distribution infrastructure to expand distribution channels (existing and new markets such as tourist catering, supermarkets) • Generic promotion to the domestic market • Development of exports • Import substitution Each of these is considered in more detail below: 24.00 22.00 20.00 18.00 16.00 L.E. 14.00 12.00 10.00 8.00 6.00 4.00 2.00 2000 2002 2004 2006 2008 2010 Year Tilapia1 Tilapia2 Tilapia3 Mullet1 Mullet2 Catfish Figure 2: Wholesale price trends for Egyptian aquaculture prodycts, 2000 to 2009 (Source: The Market for Egyptian Farmed Fish, MacFadyen G. et al, IEIDEAS Project, WorldFish June 2012). 15 5.2.1 Investment in distribution infrastructure Subsequently such plants could add higher value added lines It is remarkable that almost all of the production from Egyptian according to demand (different presentations, Headed & Gutted, aquaculture is transferred directly from the pond to a vehicle fillets etc.). Frozen products would provide immediate benefits operated by a wholesaler or direct to a wholesale market, with to producer by ensuring a market for seasonal surpluses. The very little intermediate activity. Harvest and distribution producer would also be suitable for export (whole or gilled/ conditions are very poor. Typical malpractices include: gutted, according to requirements). Packaging, ice and labor • Insufficient use of ice, and poor icing practices would all add to the cost. However, this would be balanced by the • Poor sanitation and hygiene; lack of cleaning and sanitizing fact that a) there is a market for premium products (as evidenced of fish contact surfaces throughout the supply chain by the success of sales of live fish from Fayoum) and b) value lost • Transport of fish in inappropriate vehicles through spoilage would be regained. • Lack of refrigerated storage To bring such a development about there is a need to: The consequence of the poor handling conditions is that fish 1. Prepare outline of business plans spoils very rapidly (within one or two days after harvest), with a 2. Prepare technical specifications corresponding loss of value at the end of this period. This impacts 3. Identify interested investors/groups directly on retailers, who may have to discount prices to sell fish 4. Advise/support on implementation which cannot be stored for another day of trading. Indirectly, it impacts on producers and wholesalers since their markets are The Danish Arab Partnership Program has proposed an limited to those channels which can absorb production volumes intervention to support investment in fish processing within a day or two of distribution time. Fresh whole tilapia can establishments7, to help create value added products based on remain fit for human consumption for 2 to 3 weeks, providing it is aquaculture supplies. The approach focuses on value added harvested and stored under good conditions6. through product development (frozen fish, fillets etc.). This could be adapted (with support from the IEIDEAS project) The domestic market can be expanded simply by employing shelf to support the development of fresh fish packing facilities. life extension through improved handling. This will allow fish to reach locations and market segments not currently served by 5.2.2 Market research the existing distribution system. Improved quality and shelf life The current consumption levels correspond to an average of will also open up the catering market (few restaurants and hotels approximately 1 fish/person per week. This has had a major list tilapia on their menu), as well as allowing fish to be placed in impact on food security (providing not only protein, but also supermarkets. omega 3 and 6 essential fatty acids (with implication for development of the nervous system in the fetus) and Vitamin D What is required in the first instance is a much improved (with implications for calcium metabolism.) distribution of fresh chilled fish on ice, which is the product for which there is greatest demand by the mass market of domestic However, until now there has been no research undertaken on consumers. Such a business would: consumer aspects of aquaculture. There is a need to undertake • Work with selected suppliers (under contract, this avoiding market research to characterize consumption by socio-economic unexpected price fluctuations) variables, to determine who eats fish, which types, how much, • Supply ice to farms how it is prepared etc. Furthermore anecdotal evidence suggests • Collect fish at harvest that farmed fish has a negative image, and attitudes to fish and • Receive and sort at the factory farmed fish also need to be characterized as the starting point for • Wash, weigh, and grade design of appropriate marketing strategies. • Chill and store on ice, pending distribution • Pack chilled fish in fixed weight 5.2.3 Generic promotion and market development (in polystyrene boxes, with ice) There has been no generic promotion of farmed fish in Egypt. • Distribute via a network (including operating chill rooms There is good evidence that generic promotion can help to in major population centers) expand markets, and the longer term aim should be for Egyptian aquaculture producers to fund, design and launch generic Purchasers would be able to keep fish fresh for several days after promotional campaigns. Possible activities which could be receiving the fish (in the polystyrene box in which it was supplied). undertaken include leaflets, press radio, and even TV adverts, Species, net weight, grade of fish and shelf life limit would be sponsorship etc. Such campaigns are commonly undertaken in indicated on the label. It should not be necessary to handle the other countries by aquaculture operators acting collectively, to fish at each transaction (only the box). Additional ice could also be ensure maximum market penetration of their products. Examples supplied if more was required. This system would ensure a high are Norwegian salmon, and Vietnamese pangasius campaigns. quality product delivered to wholesalers and retailers throughout the country, and it could significantly expand the market, thus The industry also needs to consider means of differentiating helping to keep prices buoyant. its product in the market. One such measure could be to seek to protect the name “Nile tilapia” for use by Egyptian operators who meet specific conditions of production. This would provide a strong promotional tool for use in both domestic and export markets. 6 Storage Life of Tilapia (Oreochromis niloticus) in Ice and Ambient Temperature , Ihuahi Josiah Adoga et al http://www.sciencepub.net/researcher/research0205/06_2727_research0205_39_44.pdf Shelflife of whole fresh Lake Malawi tilapia (Oreochromis species – Chambo) stored in ice, F Kapute, J Likongwe, J Kang’ombe, C Kiiyukia, African Journal of Food, Agriculture, Nutrition and Development http://www.ajol.info/index.php/ajfand/article/view/85311 7 The Danish Arab Partnership Program, Egypt: Economic Development and Job Creation in the Aquaculture Sub-sector Concept Paper, 21 February 2013. 16 It is not known whether this is feasible (given that the reference to 5.2.4 Development of exports the Nile is actually used in the Latin name of the fish – Oreochromis The growth of Egypt’s aquaculture sector has until now been niloticus), or whether, if it is feasible, it is too late (since others led by demand from the domestic market. Whilst this market have used this name). However, within Egypt, and in key export must remain the main focus of the future development (through markets, producers could actively seek to register this name as a measures described elsewhere in this study) there is also a role for trade mark. Where target markets operate geographical export. indication schemes (for example within the EU) producers could seek additional protection by registering this name as protected Exports of fishery products from aquaculture are estimated at designation of origin8. The Ministry of Industry and Foreign Trade 15,776 ton in 2011 (Table 3). This represents only about 1.5% of could be requested to support such an approach (for example by production. Reported destinations are Gaza and Dubai. Egypt is including recognition of such schemes in negotiations on trade unique amongst major global aquaculture producers in that it has agreements). The MoALR may have to prepare new legislation to developed its sector based almost exclusively on the domestic provide such a protection within Egypt. market. This means that export potential has hardly been exploited at all, and there is a substantial opportunity to develop export The use of the name (and an associated logo) could be linked to markets. compliance with a quality scheme (for example covering good aquaculture practices and good hygienic practices). Several The obvious target markets are the EU and Middle East countries aquaculture producers have successfully adopted this quality (particularly Saudi Arabia, UAE, Kuwait, Jordan, all of which are mark approach. substantial fish importers). However, although Egypt has been able to export marine capture fishery products to the EU since Although a complex process, the fact of seeking to protect the 2002, it has not been able to meet EU sanitary conditions for the name “Nile tilapia” would in itself create some considerable export of products from aquaculture. Even if the principal target publicity. The IEIDEAS Project could support EFPEA to conduct markets for exports are non-EU countries, it will remain a valid an initial feasibility study to help define a strategic approach to strategy to gain access to the EU market, since: obtaining registration of the name and establishing a quality • some aquaculture producers (particularly of marine fish mark scheme. species) may be able to obtain sales in the EU due to a seasonal competitive advantage compared to EU producers; Another prospect for market development would be to enhance • being unable to claim compliance with EU sanitary the nutritional value of farmed fish. Compared to marine fish, conditions creates a competitive disadvantage in entering tilapia is relatively low in lipids and therefore in the essential fatty non-EU markets for fishery products. acids (unless consumers also eat the head and the eyes, which may be the case – consumer research should determine this). Therefore developing effective veterinary drug controls and residue However, there is evidence that by supplementing the diet of monitoring systems in line with EU requirements should be tilapia with high omega 3 oils (e.g. flax seed oil), the essential fatty considered as an important short term objective for the MoALR, acid content can be increased9 (see Table 2 below). Feed suppliers as a means of improving the marketing of aquaculture products. could therefore modify their formulas to gain improvements in More details of the approach recommended are shown in food security from aquaculture (being one of the national Section 5.5. objectives of this activity), without increasing production. Nutritional value of farmed tilapia could be an important pillar of Furthermore, there is significant export potential in other Middle the domestic promotional campaign. East markets (particularly GCC countries). Whilst, these countries do not require specific monitoring systems to be in place (at least not yet), it is increasingly common to apply EU access as the benchmark for sanitary controls. Therefore even for exports to non-EU countries it is a great strategic advantage to be able to demonstrate compliance with EU requirements. Table 2: Omega 3 FFA composition of fillets from Tilapia fed diets with various flaxseed oil content Composition Flaxseed Oil 0% Flaxseed Oil 1.25% Flaxseed Oil 2.5% Flaxseed Oil 3.75% Flaxseed Oil 5% Total Lipids (g/100g) 1.1 ±0.2a 1.1 ±0.2a 1.2 ±0.3a 1.2 ±0.2a 1.1 ±0.2a Moisture (g/100) 77.4 ±o.0.7a 76.8 ±o.0.4a 77.2 ±o.0.7a 77.3 ±o.1.2a 76.9 ±o.0.4a LNA (mg/g) EPH (mg/g) 6.5 ±1.8a 18.8 ±3.0b 34.2 ±3.3c 55.3 ±7.3d 59.3 ±7.5e DHA (mg/g) 0.1 ± 0.0a 0.8 ± 0.1b 1.4 ± 0.1c 2.0 ± 0.2d 2.5 ± 0.4e 9.9 ± 2.6a 16.8 ± 2.2b 22.7 ± 2.7c 25.9 ± 2.6d 26.1 ± 2.0e Results are an average of 30 replicates. Different letters in same line signify significant difference (P<0.05) 8 For example Vietnamese fish processors recently obtained protected designation of origin in the EU for their excellent fish sauce, Phú Quốc 9 Tilapia Composition, Part I. Proximate Analysis, Factors Affecting Fatty Acid Composition, George Flick, Global Aquaculture Advocate, November/December 2006 17 5.2.5 Import substitution 5.3 Organization of aquaculture business Imports of fishery products were 160,000 ton in 2010, of which 88% were frozen small pelagic fish (herring, sardine, mackerel, operators horse mackerel) falling within HS code 0303 (see Table 4). There are two bodies which represent different groups of A significant proportion is imported and traded by private sector aquaculture producers. The UAC has a well established operators, including some products destined for smoking organizational infrastructure, with Board of Directors, and an (herring) and canning (sardine). However, the State Owned administrative and executive staff, including an experienced Enterprise (SOE), the Egyptian Fish Marketing Company, also technical adviser. However, the Union can only represent imports such products for distribution at modest margins, cooperative societies, and cannot represent the full extent of via their own outlets or via state-owned cooperative stores business operators in the supply chain (such as input suppliers, (gaameya). It is very possible that these products compete for distributors, and processors). Companies farming fish are also market share with lower priced products of Egyptian aquaculture excluded by law from formally participating in the cooperative (such as carp, small sizes of tilapia, and catfish). organizations. Table 3: Exports of fishery products from aquaculture The EFPEA is able to represent a wider range of stakeholders, and although formed in 2007, has only 26 members. It has a Board, but Year CAMPPS (ton) no executive staff, and therefore depends on the unpaid acts of its Board members for any intervention activities. 2009 1,934 Both organizations operate effectively as lobby organizations, 2010 7,100 representing the views of their members to Government on aspects of policy and legislation. However, until now, neither organization 2011 15,776 has performed the full range of functions needed at this stage to ensure the sector they represent addresses some of the challenges identified by this mission. In particular, there exist no mechanisms In general, ex-farm price of aquaculture products and CIF cost of to design, fund and implement the collective marketing actions imported small pelagics are comparable (average value of imports required for development of the market for freshwater aquaculture of these species in 2011 was US$1,561 per ton). There is a lack products. Neither organization has a business plan for the of coherence in a policy fish of purchasing imports with public development of member services. funds, which may compete with nationally produced products. Market policy for the aquaculture sector should aim to maximize In other countries, the development of strong, well-financed and the purchase of locally produced fish by SOEs. managed producer associations has made an important contribution to the development of the aquaculture sector. More work is required to characterize and identify the extent of However, in Egyptian aquaculture, there is a lack of technical, this competition. The proposed consumer research (see section 6.2) managerial and financial resources to develop a structured should inter alia identify sources and species of fish purchased, and approach to the development of future activities by sector the extent to which aquaculture species (particularly carp, catfish organizations. The weakness of these two organizations in the and tilapia) compete with imported frozen mackerel/horse field of marketing planning on behalf of the sector is a major mackerel sold direct to consumers. Purchase strategies of constraint to be addressed, if these challenges are to be importing companies should be identified. Sales of aquaculture overcome. It suggests that there is a need to support these products could be targeted at importers (both public and private), organizations to become established as effective bodies with a view to them supplying Egyptian aquaculture products via delivering a range of business related services to their members. their distribution networks. Furthermore EFPEA exists alongside the cooperative society structure and UAC. Indeed, there are some members in common. Although there are good relations between several of the individuals concerned, there is no formal agreement between the two organizations. There is a risk that if views were to diverge, then the representation of the sector to the Government would be divided. Given that there are two organizations with essentially the same objectives, and with overlapping memberships, there will also be a need to establish an effective coordination mechanism. Table 4: Imports of small pelagic fish by Egypt in 2012 Species/Code Quantity (kg) Value US$ Av.cost (US$/tonne) Frozen whole herrings (030351) 14,431,408 25,626,470 1,776 Frozen whole mackerel (030374) 42,503,140 64,627,250 1,521 Frozen whole sardines (030371) 9,047,713 9,015,780 996 Other frozen fish (whole) (030379) 75,898,056 122,219,590 1,610 Totals small pelagics 141,880,317 221,489,090 1,561 Other fishery products, molluscs and crustacean 18,547,791 87,968,169 4,743 Total imports of fishery products (excluding canned fish) 160,428,108 309,457,259 1,929 Source: CAPMAS: NB assumes that imports under 030379 are horse mackerel 18 5.4 Limited fry inputs for marine aquaculture It is clear that the development of the marine aquaculture sector is being held back by the lack of marine fish fry, and the need Marine aquaculture activities produced an output of about for hatchery production is now greater than ever. Most of these 145,000 ton in 2011. It is estimated that this equates to a total de- impacts are due to illegal operators, given that they account for mand for juveniles in the region of 1.5 billion units (Table 5). Note the majority of the supply. The Government will need to act to that 78% of the production comprises mullets, mostly eliminate the illegal fry trade. M. cephalus and L. ramada which reproduce in the marine environment but can be grown in the same low salinity systems Whilst in theory, the easiest way to do this is through enforcement as ‘freshwater’ fish such as tilapia. of the existing legislation, this may be difficult to implement in a single step, since it would have a significant impact on coastal Law No. 124/1983 prohibits the collection and removal from the livelihoods (both fry fishers and marine aquaculture producers). sea, lakes or other water bodies of fish fry (i.e. young or newly It would also create a major technical challenge (since the fry hatched fishes) and their trading without a permit issued by business is essentially a criminal activity and therefore clandestine GAFRD. Permits are only issued on the condition that fry are by nature). supplied to GAFRD. For many years the policy has been to operate a government monopoly in the collection and distribution of An alternative approach therefore needs to be found, and it is fish fry (though a network of licensed collectors and traders, and proposed that this should be by creating stronger incentives for official fry collection centers). Prices are held artificially low as a marine aquaculture producers to use fry obtained from hatchery production support measure in favor of government farms and operations (at least for species such as bass and bream, where such private fish farmers. These prices offered are substantially lower technology is already established). This means that they should be than market value, with the result that many fishers catch fry encouraged to intensify their production by a combination of legal without a license and sell it to traders who also operate illegally. measures (preventing the use of trash fish as feed), and financial incentives for intensification (rental discounts for undertaking to As well as illegal and legal capture of marine fish fry, there are a use marine fish feed, equipment required to manage more intensive number of marine hatcheries in operation (two private and three production such as monitoring, aeration etc.). in the public sector). Based on the known outputs of legal sources determined from GARFD statistics, Table 6 shows the estimated Alongside such measures, Government could introduce licensing quantities of fry derived from the different sources of juveniles of the existing fry fishers, and then gradually reduce the number of marine fish species for aquaculture, indicating that 95% of the in line with principles of sustainable fisheries. However, it should supplies are derived from illegal fisheries. be considered that 78% of the current production is mullet, for which a robust hatchery technology has not yet been developed The capture and distribution of marine fish fry (from both official (although the proven techniques do exist, they have until now and illegal operators) undermines investment in marine never been successfully extended in Egypt)11. Most Mediterranean hatcheries since hatchery facilities cannot compete on price with countries use marine capture fry of these species as inputs for official government and illegal operators, who supply cheaper fry their aquaculture sector, and Egypt will therefore need to from capture fisheries. As well as removing incentives for hatchery maintain this source of supply for mullets until such time as production, maintaining supplies of fry from the wild has several suitable hatcheries are in operation. By operating strict harvest consequences: seasons when certain species are available, alongside • High mortality due to poor harvest holding and transport restricting numbers of licenses (using access fees, allocated by conditions public auction) it should be possible to manage the exploitation • Fry with wide variation in growth rates limits improvements rates to ensure sustainable levels of fishing. in production efficiency • Commercial strategic benefits of aquaculture not realized (seasonal markets, production planning) • No potential for genetic improvement with supplies from the wild • Illegal, unregulated and unrecorded (IUU) marine capture of fry is ultimately unsustainable and carries a risk of recruitment collapse as spawning stock biomass declines (although until now there is no evidence that this is the case)10 • Conflicts (fishermen v. aquaculture) • Commercial development of improved reliable hatchery technology for mullet is undermined 10 An investigation of the stock status of the five species of mullet harvested for fry, along with other marine species (seabass, seabream and meagre) by the National Institute of Oceanography and Fisheries should be considered to be a research priority. 11 The Italian Debt Swap Project: Marine Aquaculture in Egypt is however addressing the required improvements in marine hatchery technology skills and capacity. 19 5.5 Weak sanitary and phytosanitary (SPS) Table 6: Sources and numbers of marine fry 2011 controls Source No. Of Units % 5.5.1 Residue monitoring Egypt is listed under Decision 766/2006/EC of the European GAFRD fry centers 62,528,000 4.1 Commission and is thus allowed to export fishery products to the EU. The Competent Authority for the implementation of sanitary Hatchery 15,800,000 1.0 controls of fishery products exported to the EU is currently the GOVS under the MoALR12. Ten export processing establishments Illegal catch 1,437,477,776 94.8 are listed as being approved by GOVS in September 2012. Totals 1,515,805,776 100 The EU requirements for food safety controls for animal products of farmed origin are set out in Council Directive 96/23/EC of 29 April Source: GAFRD Statistics, 2011, industry sources 1996 on measures to monitor certain substances and residues thereof in live animals and animal products13. This sets out the requirements for the design and implementation of a residue 5.5.2 Fish disease monitoring and controls monitoring plan to be implemented by the relevant Competent Current legislation on animal health controls does not apply Authority. However, Egypt has not submitted a residue to fish produced in aquaculture, and Egypt therefore has no monitoring plan for aquaculture products, in accordance with regulations governing fish diseases. There are no checks on third Directive 96/23 and is not one of the countries listed under countries supplying live juveniles or gametes for aquaculture16. Decision 2004/432/EC of 29 April 2004 on the approval of residue monitoring plans submitted by third countries in accordance The intensification of aquaculture increases the risk of occurrence with Council Directive 96/23/EC. It cannot therefore export of diseases and their spread. Although freshwater species grown aquaculture products to the EU14. in Egypt (such as tilapia and carp) are considered to be quite robust and not generally threatened by common diseases, there Other work by the IEIDEAS project has described the negative is a definite risk of aquaculture being threatened by disease. In attitude of Egyptian consumers to farmed fish, which is reported other parts of the world, substantial salmon and shrimp farming to be considered by the public to be contaminated. businesses have been devastated by the spread of fish diseases. This is probably not the case for all aquaculture products, It is therefore in the interests of longer-term sustainability that although there is no substantive evidence either way15. the MoALR and its competent authority for animal health, the To meet both export market requirements, as well as protecting GOVS, take steps to protect Egyptian aquaculture producers from the health of Egyptian consumers, there is a need for a scientifically introduction and spread of infectious fish diseases. designed and published annual monitoring scheme for farmed fishery products, to be executed by an independent body, with follow up and transparent reporting. Egypt does not have comprehensive regulatory control systems which addresses human food safety hazards in animal feeds (including fish feed). Neither is there an effective regime regulating the use of veterinary medicines (approvals, restrictions on use, record keeping, withdrawal periods, and maximum residue limits). Both of these issues will need to be addressed in the development of the SPS regulatory framework for aquaculture. Table 5: Estimated demand for marine fish fry, 2011 Group Production (ton) % of Production No. Of Units Survival % Original No. required Mullets 114,001 78 409,006,587 30 1,363,355,290 Seabass 17,714 12 63,553,326 75 84,737,768 Seabream 14,155 10 50,784,539 75 67,712,719 Totals 145,870 100 523,344,452 1,515,805,776 Source: GAFRD Statistics, 2011, industry sources 12 The Ministry of Industry and Foreign Trade is developing a proposal for the establishment of the Egyptian Food Safety Authority, which, if approved, would take responsibilities for food safety regulation. 13 See http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31996L0023:EN:HTML 14 It is commonly believed that this is due to the condition in Egyptian law, noted earlier, that water supplies for aquaculture must come from drainage canals. In fact this is not the case. 15 A recent ad hoc study by IEIDEAS project found 1 sample from 31 had measurable levels (0.01mg/kg) of Chlorpyrifos an organophosphate insecticide. Five samples had detectable presence of the organochlorine pesticide DDE (but with levels below LOQ). All other samples were “not detected” for organochlorine and organophosphate pesticides and heavy metals (Hg, Cd, Pb and As). However, there was no confirmatory testing by official methods, no follow up of positive results, no testing for illegal substances (for example malachite green), and no testing for residues of veterinary medicines (all being elements required by Directive 96/23). This ad hoc study, as do all others conducted in recent years, does not provide evidence of safety of Egyptian aquaculture products 16 in 2012 juvenile seabass were imported from Tunisia 20 6 Conclusions and recommendations 6.1 Conclusion Strengths weaknesses opportunities and threats in Egyptian aquaculture The following table provides a summary analysis of the strengths weaknesses opportunities and threats for aquaculture activities, considering separately marine and freshwater production systems (since they have different SWOT characteristics) and those issues which are common to both. Activity Strengths Weaknesses Opportunities Threats General • Clearly defined • GAFRD has limited capacity • Unexploited export, • Risk of introduction aquaculture legal and to effectively protect and tourist and domestic and spread of institutional promote the sector’s interests (especially in Upper diseases responsibility for (expand aquaculture exports Egypt) markets aquaculture to the EU; enforce laws on development capture of marine fish fry; establish effective • Native species coordination mechanisms suitable for culture with other Ministries). with strong market image and good • Land and water use conflicts culture (with agriculture, tourism etc) and environmental concerns • Characteristics in limit available sites Egyptian waters (tilapia and mullet) • Difficult licensing procedures force many operators into • Good domestic the grey economy market accustomed to fish consumption • Non-existence of coherent animal health control system for aquaculture Freshwater • Good freshwater • Seasonal temperatures • Market development • Over-supply of aquaculture water resources fluctuations create seasonal measures could tilapia to market supply pattern stimulate demand to renders aquaculture • Robust expand market businesses technologies • Lack of processing unprofitable implemented by establishments for packing • Good EU and Middle farmers with good and freezing East export markets technical skills for products which • Sector organizations lack meet sanitary capacity to provide business requirements and marketing support • Poor sanitary controls limit marketing options Marine • Good sites • Limited supply of fry from • Development and • Uncontrolled aquaculture available marine hatcheries inhibits extension of robust harvest of marine fry development hatchery technology leads to wild stock • Well developed boosts production collapse fish farms already • Poor management and high established, based production costs (including • Niche export markets • Competition from on wild fry inputs feed) cf. Greek aquaculture in the Middle East and Greek/UAE producers domestic markets for bass Europe in target markets and bream are small and price sensitive • Improved yields and • Even modest increase efficiency through in production will • Lack of national technical better feeding cause price collapse and management expertise practices unless EU market is available 21 6.2 Recommendations 6.2.1.3 Revise aquaculture legislation In the medium term, there is a need to amend/revise the Recommendations for the development of the policy, legislative framework governing aquaculture, through drafting a institutional and legal framework for aquaculture in Egypt, to new Fisheries Law and amendment of the Water Resources Law, address the opportunities and threats described are provided in to reflect the needs of aquaculture, and specifically to ensure that: this section. Recommendations have been classified into three • Access to land and water resources for aquaculture categories addressed to the three main partners in this sector: the activities is considered equably with other usage demands. government, business operators and the donor community. (irrigation, industry, drinking water) • Preferential access of Government and cooperatives to 6.2.1 Government of Egypt means of production is not expressed in the law. 6.2.1.1 Streamline licensing and permits for aquaculture • Small scale operators are defined and are exempt from The Government is recommended to streamline aquaculture licensing requirements except where necessary. licensing system to eliminate unnecessary or the burdensome procedures, requirements and approvals, moving towards a “one These laws should be developed in consultation with all relevant stop shop”. For this purpose, an Inter-Ministerial Aquaculture stakeholders to make sure a consensus is reached about the Committee could be established to jointly consider applications country’s priorities to avoid conflicts in the future. (with a consolidated application form). This Committee would comprise senior officials from ministries and authorities that are 6.2.1.4 Strengthen sanitary controls for export and domestic markets involved in aquaculture (i.e. MoALR, GAFRD, MoWRI, Ministry of GOVS under the MoALR should be requested to establish an Environment in the first instance). Ministry of Defense, local official residue monitoring program for aquaculture products. In authorities, Water Surface Police, Authority for Shore Protection the short term this will allow improved access to export markets. and Border Guards may participate where relevant. This should aim to satisfy, at a minimum, the requirements of EU The Committee could also be responsible for coordinating and Directive 96/23. It should establish an effective unit to design discussing cross cutting issues related to the development of the and implement the program and to follow up and investigate sector (such as land, water and irrigation, environment, etc.). non-compliances identified by the sampling and testing regime. In particular the committee could have the following In the longer term the monitoring should be extended to responsibilities: production for the domestic market, as a tool to provide risk • Agree on aquaculture zones and lease conditions as a assessment for Egyptian consumers. means of reducing regulatory controls whilst managing impacts. The residue monitoring plan, the annual results and the outcome • Discuss impediments to aquaculture policy developed by of follow-ups should be published17. Regulatory provisions for GAFRD concerning cross cutting issues. fish feeds (regarding contaminants) and veterinary medicines in • Raise awareness among concerned authorities about aquaculture are also recommended to be strengthened. importance of aquaculture for the economy and food Good analytical capacity (accredited to international standards) is security. already available in the MoALR Central Lab for Residue analysis of • Discuss applications for aquaculture licensing and pesticides and heavy metals in food in Dokki (although it may problems faced by individual business operators along the require some upgrading of testing methods). However, the supply chain. technical capacity of GOVS to establish such a plan is presently • Discuss impact of relevant regulatory changes on the limited. Donors may therefore wish to support the development aquaculture sector. and launch of such a program. An outline of such a program is • Consult and coordinate with the sector’s representative shown in Annex 2. organizations on issues that have impact on the sector. • Revise fees periodically to make sure they are kept 6.2.1.5 Establish a fish disease control system up-to-date in line with general economic situation and any The GOVS of the MoALR is also recommended to develop a changes in the sector. regulatory system for the control of fish diseases, to manage the risk of fish diseases undermining the aquaculture sector. This 6.2.1.2 Use GAFRD lease conditions to create incentives for better should be established in law, and comprise at least the following management elements: GAFRD is recommended to strengthen content of lease conditions • Origin-based controls on import of live fish, juveniles, eggs regarding investments in farm improvement and production and gametes (based on disease status of supplying farms) technologies (e.g. use of compound feed for marine species, • Denomination of notifiable fish diseases constraints on Nile cages, etc.) that will ultimately contribute • Regulatory powers to limit spread of diseases (e.g. zone to the development of the sector. The approach is specifically and movement controls, slaughter of infected fish etc.) recommended for the marine aquaculture sector, where, the • Surveillance and monitoring measures following conditions are indicated: • Prohibition on use of trash fish as feed (use of compound feed) The GOVS is recommended to establish a fish disease unit • Monoculture for bass, bream and meagre (with 1 or 2 specialists) to develop and manage this new function. • Use of hatchery fry for bass and bream • Use of aeration 6.2.1.6 Market policy relating to aquaculture The MoALR, in collaboration with the Ministry of Industry and These measures are intended to create incentives for the use of Foreign Trade, is recommended to establish a new market policy fry from hatcheries. To compensate for the increased cost of these to protect and improve the benefits of national aquaculture inputs (including formulated feed), GAFRD is recommended to production. The recommended key elements of this policy are to: provide a discount on the annual rental, for farmers undertaking • Review trade policy on fishery product imports (to ensure to comply with relevant conditions. tariff protection is maintained on species which compete with Egyptian aquaculture products). This principle could also apply to the freshwater sector with • Ensure fish purchasing strategies of SOEs (Egyptian Fish incentives to maximize efficiency in terms of land and water use, Marketing Company) favor nationally produced fishery and incentives to reduce waste discharges. products, where they are competitive and meet consumer needs. Lease conditions may also be used to ensure that conditions • Provide a subsidy to feed mill operators for the enrichment specified by other Ministries are applied (as decided by the of tilapia diets with high omega 3 oils. Inter-Ministerial Committee). • Facilitate the protection of the geographical indications relating to Egyptian aquaculture products. (including, if feasible, the name “Nile tilapia”) 17 An example is shown at http://www.vmd.defra.gov.uk/vrc/. 22 6.2.2 Business operators Implementation of consumer research 6.2.2.1 Ensuring coordination between sector representative Market development for aquaculture products in Egypt should be organisations underpinned by a factual analysis of data derived from a consumer As there is a need to develop a collective approach to marketing survey. This is already programmed within the IEIDEAS project. in the future, to avoid overlapping or competing functions, the It is recommended that this considers both fish consumption and two sectoral organizations (UAC and EFPEA) should seek a modus attitudes to fish in a personal interview survey of women aged operandi for collaboration and coordination, with a written MoU 18-60, selected by stratified random sampling. The consumption developed to allow information sharing and coordination of questions should aim to determine socio-economic determinants activities. This might include allowing mutual observer status at of consumption of fish (age, class, sex, region, urban/rural, ethnic Board meetings. origin, religion), as well as types of fish, frequency, place and quantity of purchase, alternatives, preparation, and consumption 6.2.2.2 Strengthening capacity of sector organizations in business occasions. A sample size of 1500 is required to provide planning and marketing approximately 10 responses per segment. The study should Private sector operators through their sectoral organizations specifically determine the extent to which aquaculture species (UAC and EFPEA) are recommended to strengthen their industry (particularly carp, catfish and tilapia) compete with imported organizations. The strengthening of these organizations is frozen mackerel/horse mackerel sold direct to consumers. recommended to include: Attitudinal questions should be designed to assess attitudes on • ensuring representation of a wider range of commercial scaled constructs derived from regional focus group interviews. stakeholders in the aquaculture sector; In particular the survey should aim to characterize and • strengthening their capacity to provide a range of support benchmark any negative images regarding aquaculture products, services to members with a view to developing capacity to with a view to monitoring impact of any future generic marketing deliver business and marketing services to the sector, campaign. including generic marketing activities. Establish market support activities Typically, aquaculture sector organizations will not only provide The sector organizations are recommended to collaborate on the advocacy on sector interests to Government, but they will also development of generic market support activities. Some of the provide a range of services to members. These might include key elements could include: collective purchase of inputs, management of social insurance • Generic promotion of tilapia (in domestic and export markets); schemes, and technical advisory and training services. They may • Quality scheme; to develop a recognizable brand image for also provide market-side services such as cooperative fish selling, Egyptian aquaculture products, based on good market research, price information and reporting and generic aquaculture practices and food safety/quality principles; promotion in key domestic and export markets. • Protection of name; to investigate the potential for protecting the geographical indication of fish produced The IEIDEAS project may wish to consider offering support to in Nile waters; these organizations, in the form of technical assistance and • Lobby for import protection; to ensure trade policy and training in business planning and service delivery in some of the purchasing policies of SOEs favor Egyptian aquaculture above functions. operators where feasible within the limitations of Egypt’s international obligations. 6.2.2.3 Implementation of a market development strategy The sector organizations are recommended to develop a collaborative approach to the implementation of a market development strategy, comprising elements of the activities shown in Figure 3 below. Market development strategy for fresh water aquac ulture products Market development to stimulate demand (main target tilapia) Domestic market Export market Marketing campaign Improved distribution channels via processing & ME Markets EU market Access via packaging platforms GOVS resi due monito ring Figure 3: Market development strategy for fresh water aquaculture products 23 Establish fish fund and finance sources (feed levy/grant) 6.3 Donor community The above activities will require a significant investment, and a high degree of coordination. Government may wish to provide International donors are engaged in the Egyptian aquaculture financial support for some of this investment, but sector operators sector, with current and planned investments by the Swiss will also need to carry some of the financial costs. It is in the Agency for Development and Cooperation (SDC) (IEIDEAS), interest of the sector to establish a marketing fund as early as European Union, Italian-Egyptian Debt for Development Swap possible, and a fund raising mechanism. In the interests of equity Program, and the Dutch Ministry of Economic Affairs. These (or (so that all operators contribute) this could be a levy based other) donors can make a significant contribution to some of system. Levies may be applied on inputs (fry, feed) or outputs the interventions described previously, especially in those areas (final products consigned to market). where there is only a limited existing capacity within Egyptian organizations. Based on the preceding analysis some of the areas 6.2.2.4 Business planning for investment of processing and distribution for donor intervention in the forthcoming period could include Investment in improved processing and distribution is considered support for the following: to be a sine qua non for market development. However, such a • Development of simple robust protocols/technologies for step will increase costs (in packaging and ice, as well as marine hatchery operation and intensive marine distribution). The assumption is that these cost increases will aquaculture* be more than compensated in value added gained by sector • Strengthening service delivery capacity of sector operators and consumers at a later stage of the distribution chain organizations (UAC and EFPEA) (especially as retailers will be able to avoid financial losses, and • Consumer survey (fish consumption and attitudes)* more consumers will have access to better quality fish which they • Business planning and technical assistance for private may be willing to pay for). This assumption needs to be tested by investment in processing platform for freshwater fishery a comprehensive business planning exercise which will: products* • Establish the technical requirements, specifications and • Establishment of veterinary drug controls and residue costing for investment in fresh chilled fish distribution; monitoring program in line with EU requirements • Undertake an investment appraisal, and cash flow forecast, • Establishment of fish disease control regime as well as a marketing plan, drawing on the results of the • Investigation of TRIPS conditions for Geographical consumer survey. Indications related to Egyptian aquaculture products • Review recommendations for a trade and market policy It is recommended that this study be undertaken within a donor regime for Egyptian aquaculture products funded project. The proposed DANIDA intervention, expressed • Revision of fisheries Law No. 124/1983 under the Danish Arab Partnership Program described earlier could be adapted (with support from the IEIDEAS project) to Interventions indicated with an* are already under consideration. support the development and promotion via sector organizations, More details of the technical approach required to establishment of a fresh fish packing concept, and support prospective of veterinary drug controls and residue monitoring program is investors in its implementation. A schematic approach is shown in Annex 2. suggested in Figure 4 below. Processing and distribution investment Technical Consumer speci cation & survey costing Business plan (generic) Cooperatives P A h m e s C EF E C a b r /UA 100 potential investors TA & SCREENIN G 5 investors Figure 4: Processing and distribution investment 24 Annex 1: Legislation applicable to the aquaculture sector Agriculture/Aquaculture Legislation Description Law No. 124/1983 concerning This is the main legislation regulating fishing in general and aquaculture in particular. fishing and regulation of The law sets the conditions and controls in fishing boats. It also stipulated that no foreign fishes, aquaculture eggs or larva should be introduced for any purpose except with permission of GAFRD and after consulting the Institute for Oceanography and Fisheries for technical opinion. The law also regulates technical research and statistics for aquaculture as it required the cooperatives for aquatic, fishermen, head of fishing boats, and fish traders to collect all statistical data concerning fishing operations and fish production according to the rules specified by the executive regulation.The law specifies fishing licensing requirements and fishing and aquatic fees. The law stipulates aquaculture requirements. It prohibits establishment of fish farms except in fallow land not suitable for agriculture and decrees that it could only use water from lakes or nearby canals. It prohibits use of fresh water except in hatcheries established by the state. The land specified for aquaculture is determined by a decree from the Minister of Agriculture, where violating farms will be demolished at the expense of the violator. The penalties set out by the law range between jail, fine and confiscation of caught material. The law provides that the executive regulation shall be issued by the Minister of Agriculture after agreement with the Minister of Irrigation and other competent authorities to develop conditions and necessary approvals for regulating aquaculture and the provisions for existing farms as well as fees decreed by the Ministry of Agriculture or to obtain approval of the Minister of Irrigation. Minister of Agriculture Decree This is the executive regulation for the law regulating fishing and aquaculture. No. 303/1987 concerning issue of The decree regulates fish farms including procedures, fees, competent authorities for issuing executive regulation for Law license, time for submitting documents and complying with all required conditions. No. 124/1983 According to this decree, it not allowed to harvest or sell tilapia less than 10 cm length. Minister of Agriculture Decree The decree included amendments to regulation of fishing and added some conditions and No. 447/2012 concerning controls for fishing craft in internal lakes. amendment of the executive regulation of fisheries and aquaculture law, issued by Decree No. 303/1987 Presidential Decree No. 190/1983 The decree lays out the functions of GAFRD, the composition of its board and their responsibilities, concerning establishment of and funding resources of the authority. GAFRD Presidential Decree No. 456/1983 The decree specifies the water surfaces under supervision of GAFRD and it stipulates that concerning specification of water aquaculture land specified by the Minister of Agriculture will be under control of GAFRD. surfaces where fishing is developed and overseen by GAFRD Minister of Agriculture Decree The decree gives GAFRD the right to monitor and control on fishing companies No. 446/1983 concerning (i.e. Egyptian Fishing & Fish Gear Company; Egyptian Company for High Seas Fisheries; and oversight of GAFRD on fish Northern Fisheries Company). resources companies. Minister of Agriculture Decree The decree prohibits use of hormone of 17 alpha methyl testosterone to produce unisex tilapia No. 2655/2003 concerning in government owned and private hatcheries to protect consumers from the residues of the prohibition of use of the hormone hormone in fish. of 17 alpha methyl testosterone to produce unisex tilapia 25 Aquaculture Cooperatives Legislation Description Law No. 123/1983 concerning The law regulates the work of aquatic cooperatives which are overseen by GAFRD. aquatic cooperatives The law includes provisions regarding the functions of cooperatives; their funding; establishment procedures; functions of members, as well as their rights and duties; functions of the board of directors, its composition and sessions; and reasons for meeting of its assembly. Minister of Agriculture Decree This is the executive regulation for the law concerning aquatic union cooperatives specifying No. 181/1984 concerning issue of procedures to establish fisheries cooperatives, their sources of funding, and other details that have executive regulation for Law not been specified by the law. No. 123/1983 Water and Irrigation Legislation Description Law No. 48/1982 concerning The law prohibits disposal in the water channels of solid, liquid, or gaseous wastes from: real estates, protection of the River Nile and shops or commercial, industrial, touristic establishments or from the sanitary drainage, without a water channels from pollution license from the Ministry of Irrigation which will issue a decree based upon recommendation of the Ministry of Health setting the measures and specifications concerning each case separately after taking samples and testing them. The Ministry of Irrigation is the only authority responsible for providing the license in question. If the analysis result does not meet with specifications and measures set by the law and has a direct dangerous pollution effect on water channels, the Ministry of Irrigation will advise the concerned enterprise to stop causes of pollution otherwise the Ministry will stop the discharge at the expense of the violating enterprise. Minister of Irrigation Decree The decree relaxes restriction for aquaculture discharge in canals. No. 92/2013 concerning amendment of executive regulation of the law for protection of water and canals from pollution, issued by Decree No. 402/2009 26 Environment Legislation Description Law No.9/2009 concerning Law No. 4/1994 established the EEAA and sets out its functions. The Authority is concerned, amendment of environment Law according to the law, with laying out the general policy for environment protection and development No. 4/1994 and monitoring its implementation with the concerned authorities. The law regulates the ways and measures for protection of air, water and air environment. It emphasizes the link between environment and development. The law specifies the authorities concerned with preservation of water environment which are the Ministry of Environment, Ports and Lighthouse Authority, Suez Canal Authority, ports authorities in Egypt, the Egyptian Authority for Shore Protection, General Egyptian Authority for Petroleum, General Department of Surface Water Police, General Authority for Tourism Development, any other authority identified by a prime ministerial decree. The law stipulates the need to conduct an EIA study before establishing certain projects. It also specifies penalties for offenders. Prime Minister Decree The executive regulation lays out the composition and functions of the board of directors of EEAA. No. 338/1995 concerning It also provides for establishment of a fund for environment protection. Furthermore, it lays out the executive regulation of environmental requirements and conditions that enterprises have to follow. environment Law No. 4/1994 Prime Minister Decree Amendments include modifications to some definitions and licensing procedures for enterprises No. 1741/2005 concerning that have hazardous waste and ways to deal with this waste. The decree also prohibits amendment of some provisions establishment of any enterprises along Egyptian coastal shores for 200m to the inside except after of Prime Minister Decree the approval of the Authority for Shore Protection in coordination with Ministry of Environment. No. 338/1995 concerning executive regulation of environment Law Lease of Land Legislation Description Law No. 89/1998 concerning The law governs all government transactions and contracts, and sets the rules for financial government bids and tenders transactions that are not otherwise regulated by another legislation. The law stipulates that rent or leasehold will be to a legal person through a public auction for transactions of a value more than LE50,000. For lower values it could be by restricted tender. GAFRD Decision No. 70/1986 According to the decision, a committee under GAFRD will determine locations suitable for concerning rent and allocation of aquaculture and establishment of hatcheries and dividing them into areas suitable for economic GAFRD land use in these activities. The value of lease or rent is determined according to the characteristics of location, availability of services and infrastructure. Land is then assigned based on a tender between applicants except in the following cases where the decision is not applicable: renting to government bodies or public enterprises; big projects that have a high economic return; if no one applies to bid; if the basic price is not reached; and land had been rented before the issue of this decision. Minister of Agriculture Decree According to the decree, fish farms and hatcheries overseen by GAFRD are offered for rent or lease No. 1132/2007 concerning in public auctions for a period, or periods, that should not exceed a maximum of 25 years subject offering aquaculture and to the condition that the tenant should expand vertically in fish production using culture or hatchery hatcheries overseen by GAFRD for productivity techniques and establishing the necessary infrastructure to achieve this objective. rent or lease-holding GAFRD conducts periodic reviews at the end of each lease period to renew the contract. The value of leasehold is reviewed based on prevalent prices. GAFRD has the right to break the contact and reoffer the farm or hatchery in public auction. 27 Annex 2: Outline intervention for introduction of aquaculture residue monitoring plan Background and needs to be addressed Egypt has been permitted to export fishery products to the European Union since 2002, and is listed in Annex II of Commission Decision 766/2006/EC. Ten establishments are approved by the nominated Competent Authority, the GOVS under the MoALR, for the export of fishery products from capture fisheries. However, Egypt is not permitted to export aquaculture products to the EU, since it has not submitted a residue monitoring plan in line with the requirements of Council Directive 96/23/EC of 29 April 1996 on measures to monitor certain substances and residues thereof in live animals and animal products. This lack of access to the EU market inhibits the marketing options for Egyptian aquaculture business operators, at a time when the domestic market appears to be increasingly saturated, especially in the case of tilapia at the end of the growing season, when harvest quantities are the greatest. Furthermore, compliance with EU sanitary conditions is regarded as an important marketing tool for increased penetration of other markets, including Gulf countries, as well as Egypt’s domestic tourist and multiple retail markets. Directive 96/23/EC requires EU Member States (and third countries) which supply animal products of farmed origin to design and implement a residue monitoring plan, which should include sampling and testing for substances specified in the Annex to the Directive (shown below). Sampling levels and frequencies are also specified. GROUP A - Substances having anabolic effect and unauthorized substances (1) Stilbenes, stilnene derivatives, and their salts and esters (2) Antithyroid agents (3) Steroids (4) Resorcylic acid lactones including zeranol (4) Beta-agonists (6) Compounds included in Annex IV to Council Regulation (EEC) No 2377/90 0f 26 June 1990 GROUP B - Veterinary drugs and contaminants (1) Antibacterial substances, including sulphonomides, quinolones (2) Other (a) Anthelmintics (b) Anticoccidials, including nitroimidazoles (c) Carbamates and pyrethroids (d) Sedatives (e) Non-steroidal anti-inflmmatory drugs (NSAIDs) (f ) Other pharmacologically active suntances (3) Other substances and environmental contaminants (a) Organochlorine compounds including PcBs (b) Organophosphorus compounds (c) Chemical elements (d) Mycotoxins (e) Dyes (f ) Others Egypt should also have in place national regulations which establish a list of unauthorized substances, and permitted levels of authorized substances and environmental contaminants. Egypt’s export of fishery products to the EU are governed by the Joint Decree 2001/1909 of the Deputy Prime Minister and Minister of Agriculture and Land Reclamation, and the Minister of Economy and Foreign Trade. This sets outs some of the basic requirements for export of aquaculture. However, the regulation is out of date and needs to be updated to take into account current aquaculture practices and existing controls relating to approval and distribution of veterinary medicines. GOVS has access to laboratory testing facilities within the Central Laboratory for Residue Analysis of Pesticides and Heavy Metals in Foods under the Agricultural Research Centre of the MoALR. These facilities are accredited according to ISO 17025 by an international accreditation body (Finnish Accreditation Service). However, the specific capacities of the laboratory and scope of the accreditation in relation to all of the tests associated with the above parameters does not address all of the parameters required for residue monitoring in aquaculture products18. It is therefore necessary to develop and validate some new test methods (the laboratory appears to have all of the equipment necessary, but lacks reference materials), validate methodologies and participation in proficiency testing for these parameters. Screening protocols will also need to be developed to allow the use of rapid tests for initial assessment of compliance in samples taken. To address these identified needs, the following intervention approach is recommended. 18 See http://www.finas.fi/Scopes/T219_A10_2013.pdf for the scope of accreditation 28 Overall objective To contribute to sustainable economic development of Egypt Specific objective Develop and implement a sustainable residue monitoring plan for export of aquaculture products from Egypt to the EU Result Residue monitoring plan implemented in line with Council Directive 96/23/EC of 29 April 1996 on measures to monitor certain substances and residues thereof in live animals and animal products Objective indicator of achievement Egypt added to the list of countries approved by the European Commission for the supply of aquaculture products to the EU, under Commission Decision 2004/432/EC on the approval of residue monitoring plans Activities • Technical assistance for revision of legislation concerning approval, distribution and use of veterinary medicines in aquaculture • Technical assistance for design and implementation of residue plan, preparation of annual report • In service training for GOVS/laboratory staff in veterinary drug use in aquaculture and monitoring (including EU study tour) • Technical assistance for upgrading/development of appropriate testing methodologies • Supply of reference materials and proficiency testing • Financial support for cost of sampling and testing (two rounds of samples) Precondition Government of Egypt (GOVS, under MoALR) should undertake to finance the implementation of the RMP on an annual basis after the end of the project. It is not financially feasible for the plan to be financed by laboratory test fees charged to operators. Implementation arrangements Implementation period should be over two years, in three phases. Phase 1 should support the revision of legislation, develop the plan, upgrade the laboratory capacity and train staff. Phase 2 should include the first round of sampling and testing and support follow ups and the preparation of the residue monitoring report for submission to the EU. In Phase 3 the project should also support a second round of sampling, testing and reporting undertaken by the Competent Authority, with limited technical assistance support as required. Budget The dimensions of the aquaculture sector in Egypt (annual turnover c.US$1 billion at farm gate prices) justify a substantial investment to ensure development of permanent capacity. A project budget up to U$250,000 is proposed. 29 This page intentionally left blank. 30 This page intentionally left blank. 31 This publication should be cited as: Goulding, I., Kamel, M. (2013). Institutional, Policy and Regulatory Framework for Sustainable Development of the Egyptian Aquaculture Sector. WorldFish, Penang, Malaysia. Project Report: 2013-39. The CGIAR Research Program on Livestock and Fish aims to increase the productivity of small-scale livestock and fish systems in sustainable ways, making meat, milk and fish more available and affordable to poor consumers across the developing world. http://livestockfish.cgiar.org/. Design and layout: WorldFish. Photo credits: Front cover & back cover, Heba El Begawi. Printed on 100% recycled paper. © 2013. WorldFish. All rights reserved. This publication may be reproduced without the permission of, but with acknowledgement to, WorldFish. Contact Details: WorldFish, PO Box 500 GPO, 10670 Penang, MALAYSIA Web: www.worldfishcenter.org 32